OBJECTIVE: Epidemiological surveys suggest that half of mental disorders in the community are treated in general medical settings. This paper examines delivery of mental health services in psychiatric, primary care, and specialty medical clinics in the Department of Veterans Affairs (VA), the largest integrated public-sector health care system in the United States. METHODS: The study examined all outpatient visits to VA clinics between October 1996 and March 1998, a time during which VA policy promoted a shift to a primary care model. For veterans with a primary diagnosis of a mental or substance use disorder who made any visit to a VA psychiatric, primary care, or specialty medical clinic, we compared the locus of care and case mix as well as changes in treatment patterns during the study period. RESULTS: Of 437,035 veterans treated for a mental disorder during the final six months of the study period, only 7 percent were seen for their mental disorders exclusively in primary care and specialty medical clinics. Compared with veterans with mental disorders treated in specialty mental health clinics, those treated in medical clinics had less serious psychiatric diagnoses and made fewer visits. While there was a substantial shift of care from specialty to primary care during the study period, no comparable change in the distribution of care between medical and mental health settings was found. CONCLUSIONS: Treatment patterns in VA clinics differ markedly from those in the private sector. Research is needed to determine whether and how staffing models developed in HMOs and community samples should be extended to these public-sector settings.